Turkey has opened books for its first bond deal since last month's referendum on the constitution granted President Erdogan sweeping new powers. The sovereign released initial price thoughts for a US dollar benchmark-sized bond due May 2047 at 6.125% area, according to a lead. Bankers away reckon the bond is coming about 25bp-30bp back of fair value.
Turkey's 6.625% February 2045 notes - its longest-dated outstanding notes - closed on Wednesday at a yield of 5.67% or Z-spread of 322bp, according to Tradeweb. The new bonds are being marketed at a spread of about 359bp over mid-swaps. One investor expects the issue to attract a lot of interest, despite some concerns over the country's economics.
"I think they have made much less progress than most other [emerging market sovereigns] in recent structural reform," said Oliver Weeks, economist at Emso Asset Management. "Fiscal policy is loosening significantly preventing any improvement in the current account. Credit policy is also loosening though short term liquidity has been kept relatively tight.
Comments
Comments are closed.